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Income tax hike - with property tax lure - heads gov's way

(AP)- For the first time in his four-plus years in
charge, Gov. Tim Pawlenty will get to act on a bill raising the
state income tax. He's not leaving any mystery about his intention
to veto it.

The House voted 73-58 on Friday to send the Republican governor
a bill that creates a new 9 percent income tax rate on top earners.
The money it raises - about $452 million in the next two years -
would pay for homeowner property tax breaks.

The state would take over some school levies and homeowners
could also see refund checks depending on the amount of property
taxes they pay in relation to their income.

The new fourth tier of the income tax would apply to taxable
income above $400,000 for married couples and $226,000 for single
filers.

Friday's vote coincided with the release of a Minnesota Public
Radio News poll that found 72 percent of likely voters favor taxing
wealthy incomes at a higher rate to lower property taxes. The poll
of 625 likely voters, which also found Pawlenty with a 55 percent
approval rating, was taken this week and has a margin of sampling
error of plus or minus 4 percentage points.

Despite the expected veto, Democrats said they wanted to send a
message to Pawlenty and Minnesotans that property tax relief is a
top priority. They said nine in 10 homeowners would benefit while
only 1 percent of taxpayers would see their income taxes rise.

"This is a good bill, and 99.9 percent of you on the other side
know it is," said Rep. Tom Rukavina, DFL-Virginia. "Why don't you
have the intestinal fortitude today to stand up to your governor
and say `Governor, do what's right."'

Republican legislators argued that Democrats were offering false
hope to homeowners by passing a plan that won't become law.

"If it is truly a priority of this Legislature then let's find
a way to do it within the $2.2 billion surplus," said Rep. Paul
Kohls, R-Victoria. "You don't need to raise taxes on one group of
people to provide tax relief."

The Senate vote Thursday was also well short
of the two-thirds
strength that would be needed to override the promised veto.